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Barrister, Lawyer

Category: Real Estate Law

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Experience: 15 years real estate, Realtor. Landlord 26 years

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My adult son and I have a joint ownership in a condominium

Customer Question

My adult son and I have a joint ownership in a condominium in Orange County, CA, and I am considering transferring full ownership to him without compensation. To avoid taxes would it be better to use a quitclaim or gift deed and why, and would the title transfer affect the property taxes?

Submitted: 5 months ago.

Category: Real Estate Law

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Customer:replied 5 months ago.

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To avoid taxes would it be better to use a quitclaim or gift deed and why, and would the title transfer affect the property taxes?

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Either one will accomplish the same thing. There is no difference tax-wise because if it is a transfer for less than fair market value, you are making a gift of the value of the interest transferred.

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And no, if this is a transfer from a parent to a child, it would not trigger a reassessment as this is an exempt transfer.

Using either type of transfer would result in there being a gift made from you to your son and potential gift taxes being due from you. The recipient doesn't pay any gift tax.

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However, you can avoid any gift taxes by filing an IRS Form 709 in the year of the gift with your taxes. This will allow you to use up a portion of your $5.45 million lifetime gift tax exemption and avoid paying any gift taxes.